Iran Conflict Upends Goldman’s Rate Bets, Tightening FICC Woes
Goldman Sachs’ fixed‑income desk was caught off guard as the Iran war shifted monetary-policy expectations, pushing markets to pricing higher rates and inflicting a roughly 10% revenue drop in the FICC unit for Q1. The weakness followed bets tied to rate cuts and inflation scenarios, though equities trading benefited from volatility, and Goldman assisted clients in liquidating positions during the turmoil. The episode underscores Goldman’s historically risk‑tolerant rates strategy, led by Anshul Sehgal and Ashok Varadhan, and contrasts with a stronger performance elsewhere while Denis Coleman blamed a tougher market‑making backdrop for the overall FICC pullback.
